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Tuesday, October 16, 2012

CFPB Issues Small Entity Compliance Guide to Remittance Rule

The CFPB yesterday issued a Small Entity Compliance Guide for its final remittance transfer rule that is slated to go into effect on Feb. 7, 2013. The guide’s purpose is to provide an easy-to-use summary of the remittance rule, and highlight issues that businesses—particularly small business—may want to consider when implementing the rule, the CFPB said.

The CFPB stated in the guide’s introduction the agency “anticipates that most businesses that qualify as ‘remittance transfer providers’ will have to make some changes to their processes, software, contracts, or other aspects of their practices.”

ABA has pointed out to the CFPB many times that the rule’s costs and strict liability provisions, which go beyond what Congress intended, are likely to drive many banks—especially community banks—out of the remittance market.

ABA also explained that while the revised 100-transactions-per-year safe harbor that the CFPB issued in August is an improvement, it is still unlikely to help many smaller providers. The association continues to urge the bureau to consider an extension or possibly a phased-approach to the rule’s implementation.

Read the guide.

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